Most service company owners I've ever worked with have the same blind spot. They hire technicians, set a billing rate, stay busy, and wonder why the margins never show up. The hourly billing rate is often forgotten because it’s buried inside a task price. They don’t charge by the hour; most charge by the task. It’s the flat-rate or upfront pricing method.
The answer is almost always the same: They've never truly reckoned with the 60/40 problem. Here's the math.
In an eight-hour workday, the average field technician is genuinely billable for about 60% of their time. The other 40% — two to three hours every single day — is gone. Drive time. Cancellations. Parts runs. Callbacks. Waiting for the next call. Paperwork. Weekly meetings. Monthly meetings. Safety meetings. It evaporates before you ever see a dime from it. Don’t forget cleaning the truck, organizing the stock, and truck downtime for maintenance. I’ll stop, but there is still more.
Scale that up. Work four weeks at eight hours a day and you have 160 hours in a month. Forty percent of that is 64 hours lost. That's 8.5 full working days every month where your truck is running, your tech is on the clock, your insurance is ticking — and your invoice book is closed. Out of roughly 21 working days, you're only truly productive for about 13. I know, you can put them on commission and start a whole new set of problems.
Now, some truth: You cannot stop this. It is baked into the nature of field service work. Traffic doesn't negotiate. Customers cancel. Parts aren't always on the truck. The 60/40 problem isn't a management failure — it's physics. The only question is whether you've built your pricing and your business model to absorb it, or whether you're pretending it doesn't exist.
You can only manage it. Drive efficiency relentlessly — better dispatching, smarter routing, first-call resolution, stocked trucks, tight scheduling windows.
Every percentage point you claw back from that 40% goes straight to your bottom line.
Getting from 60% billable to 65% billable doesn't sound dramatic. But it's the difference between a good year and a great one.
Let's be honest about the other side of this equation: Going back tomorrow for that last hour to finish up, an extra smoke break here, a long parts conversation there, a few extra minutes parked before ringing the doorbell, another call to see what your buddy is up to. None of it is malicious. All of it is expensive. This is human nature.
The owners who win long-term are the ones who price for reality, not best-case scenarios.
If you expect 60% efficiency, price for 50% and target 30% profit so that when real life delivers you 20%, you survive it. Because the months when everything goes wrong — slow weeks, cancellations, a big warranty callback — those months don't pause your fixed costs for a second.
The 60/40 problem never goes away. Build a business that doesn't need it to.
About the Author
Peter Morici is the author of People Buy What They See: A Survival Guide for Every Technician Who Works in Someone's Home. Visit TheServiceTechMentor.com.
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